Bank of Thailand forecasts lower economic growth during Omicron outbreak

With the emergence of the Omicron variant in Thailand and an uptick of cases after the New Year holiday, the country’s central bank says the economy might grow slower in the first half of the year.

The kingdom has seen a revival in tourism, especially over the past two months with the Test & Go quarantine exemption scheme. Registration for the entry scheme has been closed due to the emergence of the recently-discovered strain, leaving the future of tourism uncertain.

Along with the tourism rebound, domestic spending has also supported Thailand’s economy. But since the Omicron outbreak, taking a regular at-home Covid-19 test has become the “norm,” restrictions have tightened, and people in close contact with Covid-19 cases have been advised to work at home. The Bank of Thailand said in a statement, which was reported by Reuters, the outbreak is a key risk.

The bank says Thailand is expected to control the spread of Omicron by the first quarter of 2022, but the bank’s senior director adds that the outbreak could be more severe and longer than expected.

As Thailand’s GDP is expected to grow by 3.4% in 2022, households and businesses’ financial stability remained precarious amidst high levels of consumer and corporate debt that were also considered a risk.

An associate governor at the central bank says inflation is also expected to rise slightly in the first half of 2022 as targeted, and the bank has been preparing to interfere in markets if the baht currency gets excessively volatile. He adds that the committee will only meet six times a year, or every seven to ten weeks, instead of eight times or every six to eight weeks in the past, due to the market’s burden on the future.

SOURCE: Reuters